Proposed code changes affecting restaurants and bars would have a chilling effect in an already challenging business climate on University Hill, business owners and residents told the Boulder City Council late Tuesday night.

Dozens of people filled council chambers and waited until 10:30 p.m. for a public hearing on land-use code changes, including a proposal to allow only beer and wine to be served at establishments within 500 feet of the University of Colorado campus.

The City Council did not take any action Tuesday and continued deliberations to next week's special meeting.

Representatives of the CU student government told the City Council that more problem drinking happens at house parties than in licensed establishments, while the owners of bars and restaurants said that even if their own businesses were grandfathered in, the rules would discourage new businesses from opening and hasten the decline of the Hill business district.

Several of those business owners said they live in the University Hill neighborhood with their young children and are deeply invested in keeping it a family-friendly place.

Dakota Soifer, who owns Cafe Aion, said he would not have opened his business on the Hill if the proposed changes had been in place. Liquor represents just 11 percent of his sales, he said. But as a fine dining establishment, offering cocktails is an important part of the business plan.

"It was a really huge risk to go up to the Hill and do what we do," he said. "If these rules were in effect, it would have seemed too risky."

Ryan Shorter, owner of Cosmo's Pizza, said that when he first opened, the only business he got was the late-night business from staying open until 2:30 a.m. Today he owns four restaurants, but if he hadn't been able to stay open late, the first Cosmo's location might have folded.

"I wouldn't still be here in the position I am if I couldn't be open late," he said.

'Destructive culture of the Hill'

But neighborhood activist Kim Vorhees cited the history of riots and out-of-control parties on the Hill before the ban on outdoor furniture and the nuisance party ordinance were put into effect to argue that new regulations could improve the culture on the Hill.

"We must do everything in our power to change the destructive culture on the Hill," she said.

Speaking as a private citizen, Beverage Licensing Authority member and University Hill resident Lisa Spalding said the basic principle of using environmental controls to reduce binge drinking is well established.

Boulder officials are considering adopting a series of changes to the land-use code in the hopes of reducing problem drinking and limiting the impacts on nearby residential areas.

The current code treats restaurants, brewpubs and taverns the same. The proposed changes create new definitions in the zoning code for restaurants, bars, neighborhood bistros and late-night restaurants with and without liquor service and ties those uses to certain kinds of liquor licenses.

High-impact uses would have to hold neighborhood meetings and develop management plans. Currently that's only required in some areas.

The City Council also will consider whether to make any changes to the waiver of the 500-foot rule that allows liquor licenses near the CU campus. The city could revoke the waiver or change the waiver to allow only beer and wine.

Liquor board could be replaced

City staff also have recommended that the Beverage Licensing Authority made up of appointed volunteers be replaced with a municipal judge to hear violations.

That was one change that received broad support from alcohol-serving businesses, which have complained that the liquor board is unfair and inconsistent.

Bo Mai, owner of the now-defunct K's China, which closed after the liquor board imposed strict conditions on his liquor license, lambasted the Beverage Licensing Authority as "incompetent" to make decisions.

Boulder City Council members asked detailed questions Tuesday about how much proposed changes to alcohol-related land use rules would affect established businesses and how quickly they might change the mix of business on University Hill. The new rules would not affect existing businesses, and existing businesses could sell or transfer their licenses.

"It would seem to me that change would be extremely slow if they can just pass on the liquor license," Councilwoman Suzy Ageton said.

City Attorney Tom Carr said his opinion is that anything that would require a new liquor license application would trigger the new rules.

Councilman George Karakehian asked for verification of a claim by business owners and even Sean Maher of Downtown Boulder Inc. that fewer bars and restaurants are staying open late than even a few years ago and that existing regulations are working.

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